‘Made in/by Spain’: Forging a New Brand Image in the U.S.

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In the middle of March, Don Felipe and Dona Letizia, the prince and princess from Spain’s Asturias province, traveled to New York with Miguel Sebastian, Spain’s minister of industry, and a large group of business leaders. Their goal was to promote the image of Spanish companies in the U.S. by launching a “Made in/by Spain” campaign and establishing a new Spain Business Forum to facilitate cooperation between Spanish businesses and U.S. government institutions. The United States remains one of the missing pieces in Spain’s globalization process. What is the perception of Spanish brands in the U.S., and how should Spain position its companies?

This public-private partnership hopes to assist Spanish companies that are global leaders in such sectors as renewable energy, construction and infrastructure management to win a piece of the Obama administration’s stimulus plan funding. Of the US$787 billion in the plan, more than US$315 billion will be destined to sectors in which Spanish companies are leaders.

The U.S. will continue to be an unresolved issue for Spanish companies, the Prince of Asturias noted during his visit. The acquisition of Sovereign Bank by Banco Santander; the concession of a freeway construction project in Texas to Spain’s Cintra S.A.; Acciona’s plans to build wind power plants in Iowa: These examples amount only to a “modest” presence for Spain in the U.S., the heir to the Spanish throne indicated. Currently, Spain represents 2% of global trade, but only 0.5% of the business volume in the U.S.

Joseph Francesc Valls, professor of marketing at the ESADE business school in Spain, explains that until now, the efforts of Spanish companies to enter the U.S. consumer market — the world’s largest — have been made on an individual level. However, in his opinion, things are changing now. According to Valls, the arrival of the Spanish delegation in New York recalled hundreds of activities in 1987 that were timed for celebrating the bicentennial of the French Revolution. They were organized that year by the Colbert Committee, a group of French companies that were created for promoting that country’s global brands, with the goal of bringing those products into the U.S. “Although Spain is doing this in a more modest way, this is the first time that Spain has shown a clear institutional and private-sector interest in the U.S. market.”

Valls notes that the U.S. has opened up, especially for products in agribusiness and the light industrial sector, but that Spanish companies have yet to penetrate these markets effectively. Some companies, such as Freixenet, have managed to enter the U.S. successfully on their own. That company has managed to gain a significant share of the sparkling wine sector. Now, the moment has arrived for making an “institutional push, using the Chamber of Spanish Commerce. The Spanish monarchy is ready to lead processes of these sorts [with] the Forum of Famous Brands (a public-private organization promoting Spanish brands) and ICEX (the Spanish Institute of Foreign Trade), a very powerful organization that assesses markets and prepares to target them when necessary. After this first loud knock on the door, the time has come for definitively entering the U.S. market. [We] don’t have to rush in, but neither is there any time to waste.”

Valls adds that at the moment, the positioning of Spanish firms in the U.S. is vague. “On the one hand, there are some companies that have their own brands that don’t identify themselves as coming from Spain. On the other hand, others in the food industry are making more comprehensive efforts to do so. This is a market that needs to be explored, and which can still be entered, given the opportunities that the crisis offers. As a result, you have to make an effort in coming months.”

In fact, there aren’t many Americans who can tell you which globally known companies, such as Zara, are Spanish, or that Spain is now the world’s eighth largest power. Perhaps as a result, another goal of the “Made in/by Spain” campaign is to change the perception of Spain in the U.S., and bring it more in line with reality.

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Levels of Awareness

According to Gildo Seisdedos, professor of marketing at the IE Business School, there are three levels of awareness about Spain in the U.S. At the lowest level, he says, “There is deep and significant ignorance, even confusion, which leads to identifying Spain with Latin America. Second, there is a level where there is a higher degree of knowledge, comprising those who know that Spain is part of Europe and who associate the country with a typical image related to tourism, bullfighting, the running of the bulls at Pamplona and so forth. At the third level, there are those who have an image of Spain and its companies that is much closer to the new, modern Spain, with a growing interest in many areas such as renewable energy.”

Three researchers at the Royal Elcano Institute recently completed a thorough study of the global image of Spain according to U.S. public opinion — that is to say, the perceptions and evaluations of average citizens, not academics. The study, “The Image of Spain in the United States,” was co-authored by Javier Noya, Beatriz Rodríguez, and Antonia María Ruiz Jiménez, and published at the end of 2008. Their analysis shows that the image of Spain continues to be burdened by what they call the “paradigm of Hemingway”: the romantic association of the country with such elements as sun, bullfighting and flamenco. Nevertheless, the authors explain that the view of Spain in the U.S. is favorable, and that it has improved over the past decade, despite the turbulence associated with the War in Iraq. Spanish troops were sent to the war, but then withdrawn after the general election of March 14, 2004, because the war generated such political debate in the country.

The researchers add that the image of Spain has become more and more positive in the U.S. in recent years. Spain, they say, “is now [seen in the U.S. as] less different from other Western countries than it was ten years ago,” when the researchers studied the same characteristics. They attribute this trend to the growing presence and visibility of Spanish culture in the U.S. (such as actors and athletes). Although stereotypes remain, new symbols are beginning to appear, especially among younger Americans and those who have a higher education. The report notes, moreover, a “diversification of images about Spain,” and the lessening of the association with familiar themes. Nevertheless, the authors say that the image is vague. There is much more ignorance about Spain in the U.S. than in Europe and Latin America. “Our image is in transition; the old image seems to be disappearing, but the new one is still not clearly defined.”

In the U.S., unlike in Latin America, Spain is still not perceived as a country with a strong economy and brands that are well-known. As for the attractive Hispanic market in the U.S., with its population of more than 45 million people, the researchers note that the image among this group is better than in the rest, “but not much better. There is greater sympathy, an emotional tie. But this does not translate into a more positive valuation or a greater disposition, for example, to buy Spanish products.” For this segment of the U.S. market, the authors note one relevant fact: The image of Spain for Hispanics appears to be better than that of their countries of origin. “More specifically: A Mexican in the U.S. has a better opinion of Spain than he does of Mexico, for example, in such historic aspects as the subject of the Spanish conquest [of America]. Probably, the cultural differences with the U.S. and the need for creating ties that strengthen the feeling of belonging to the Hispanic culture, wind up tempering any prejudices against Spain.”

The authors explain that the image of Spain among Latin Americans is burdened by imperial and colonial stereotypes. Among immigrants who have recently arrived in the U.S., the stereotypes of their country of origin are maintained. However, the typical Cuban’s image of Spain (more positive) differs from that of a Mexican (more negative). In the second generation, relationships with Latin America weaken. As a consequence, “the vision of Spain can be freed from negative stereotypes in such a way that if [these individuals] maintain the language, the relationship of cultural proximity with Spain can become more intense: The negatives are lost, and the positives remain.” For example, the authors cite data from the Governability Barometer of CIMA (the Ibero-American Consortium for Market Research and Advice). In this study of several Latin American countries and of Hispanics in the U.S., “King Juan Carlos I gets a better rating among Hispanics in the U.S., who appreciate him far more than the average Latin American.”

According to Valls, Spain has a big opportunity to identify Hispanics as its own. When you analyze feelings of belonging, it becomes clear that people identify more with their countries of origin. Nevertheless, Valls believes that in their current phase of growth, Hispanics “[occupy] a very important position — the linguistic ties with them can facilitate access to numerous markets that would otherwise be very difficult [to enter].” Along the same lines, according to the study, Spanish business executives offer an opportunity for Hispanic executives who want to enter the European market.

In fact, the study emphasizes the enormous interest in the Spanish language and Spanish culture that exists in the U.S. More specifically, the researchers emphasize the importance of teaching Spanish in the second and third generations, so that it is not lost. “The more that Hispanics associate Spanish with Europe and not with Spain, the better it is for Spain. For Hispanics, [Spain] will be the Europe that, like them, speaks Spanish.”

The researchers conclude by noting that Spain’s image problem in the U.S. is its unfamiliarity, “even among Hispanics, and more so among the second generation. Nor are they aware of the new reality of Spain. As for the new symbols that have acquired visibility in the U.S. — such as actors, athletes and chefs — they don’t associate them enough with Spain, either.” The business problem follows. “Although the connotations of ‘made in Spain’ are not negative — since they are not associated with bad quality — they [nonetheless] don’t know the products of this country.” The good news is that there is interest in getting to know these products. The potential demand is significant, the authors say, and the U.S. is a favorable ground for promotional activities for “made in Spain.” In a survey of 1,500 Americans (including 500 Hispanics), 83% of Hispanics and 82% of non-Hispanics say that they have “ a lot” or “considerable” interest in consuming Spanish products.

The Strategy of Positioning

Valls notes that Spanish companies have been late to enter the U.S. for two reasons: The language barrier, and the great opportunity that opened up for them during the 1980s in Latin America in basic sectors and infrastructure. “I wouldn’t say that this has derailed [Spanish companies’] progress toward the North. However, geopolitically, it gave the impression that being in Latin America, it was easier to enter the U.S., and that entering the U.S. impeded their presence in Latin America. In addition, there was the Helms-Burton Law (which prohibited companies that did business in Cuba from entering the U.S.) That law, which impeded efforts to negotiate with Havana, seemed on occasion to say that [companies] had to choose one or the other. Now, the time has come for [companies to position themselves] seriously in the U.S.” First, he says, in agribusiness products; then in fashion, and third, in all of those emerging sectors such as renewable energy. “The U.S. market is the great test for later directing our exports anywhere we want. You don’t merely have to make the effort of direct investments; you also have to establish alliances. This is a very important time in the process of globalization; companies [should] get to know the world, so that in three or four years, in the medium term, they can fly all by themselves.”

Seisdedos, an expert in urban marketing, notes that Spain is outstanding in other sectors as well, such as infrastructure, urban construction and project management for roads, airports, hospitals and tunnels. In Madrid, where Seisdedos is the director of the Forum for Urban Management, he constantly receives visitors from public agencies in the U.S. who are interested in the process of renovating infrastructure. “They come to see how it has been possible for Spain to transform itself over the past 15 years, all by itself. The ambitious projects for renovating infrastructure have been done with its own companies, such as ACS, Ferrovial and OHL.”

Seisdedos is the co-author of a study entitled, “Commercial Brands and Places: A Two-way Street,” in which he examines how commercial brands support themselves in particular places and how places, in turn, can support brands and make them more competitive. Seisdedos emphasizes the importance of “policies for realizing symbolic events and projects that relate a piece of territory with the sector.” Initiatives such as those in New York “help Spanish companies feel proud, and use ‘Spanish’ as a distinctive element,” he says. “That way, you avoid having brands such as Zara get bogged down in their Spanish place of origin.” There is a growing trend toward companies that are known as “emerging” and those that compete in a mainstream (non-Hispanic) market and don’t make use of the ‘Spanish’ identifier. Seisdedos explains that the same thing happens with the “impostors” who don’t make use of the place of origin but who could be interested in associating themselves with stereotypes because they could have much better access to the U.S. This could be the case with a stylish brand that has associations with gypsies or Andalucia, such as Vittorio y Lucchino. Although its name appears to be Italian, it could be attractive for that Spanish company to create – and exploit — a territory-based brand of greater or smaller size, such as Seville, Andalucia or Spain.

Nevertheless, Seisdedos notes that in order to associate a territory with a company, it is very important to pursue a “cluster” strategy. On the one hand, you need initiatives that are less short-term and more long-term than the recent initiative in New York. He stresses how difficult the U.S. market is: “It is very competitive, with certain aspects of protectionism.” He also stresses the need for lobbies as an instrument for capturing a share of the Obama stimulus plan in those sectors where Spanish suppliers stand out.

APA

‘Made in/by Spain’: Forging a New Brand Image in the U.S..
Knowledge@Wharton
(2009, March 25).
Retrieved from http://knowledge.wharton.upenn.edu/article/made-inby-spain-forging-a-new-brand-image-in-the-u-s/

Chicago

"‘Made in/by Spain’: Forging a New Brand Image in the U.S."
Knowledge@Wharton, March 25, 2009,
accessed March 03, 2015.
http://knowledge.wharton.upenn.edu/article/made-inby-spain-forging-a-new-brand-image-in-the-u-s/